- The president is considering forgiving up to $10,000 in student loan debt per borrower and extending the loan moratorium in place since March 2020
- The current moratorium is expected to end Aug. 31 and Biden could extend it through the end of 2022 or until next summer
- Biden is looking to appeal to young voters ahead of midterms that could spell trouble for Democrats
- ‘Today is a good day to cancel student debt,’ Rep. Ilhan Omar wrote on Twitter Tuesday
President Biden is considering extending a Covid-19-induced pause on student loan payments yet again and the federal government has in recent weeks told student loan servicers not to contact borrowers about making payments again one month ahead of the moratorium’s deadline.
The president is also still considering forgiving up to $10,000 in student loan debt per borrower.
The current moratorium is expected to end Aug. 31 and Biden could extend it through the end of 2022 or until next summer as the president seeks to appeal to young voters ahead of the midterm elections.
Debt forgiveness may follow the extension, though the president has not reached a final decision, according to Bloomberg. Biden has been under intense pressure from progressives to do forgive as much as $50,000 in student debt and it’s unclear if forgiving $10,000 will soften their cries.
‘Today is good day to cancel student debt,’ Rep. Ilhan Omar wrote on Twitter Tuesday.
Critics have said that student loan forgiveness would disproportionately benefit the wealthy, and for that, the Biden administration plans to cap eligibility somewhere between a salary of $125,000 and $150,000.
Biden has neared a decision on student loan forgiveness three times over the last several months but backed away each time, one Democrat close to the White House told Bloomberg. At a time of 9.1 percent 40-year-high inflation, aides worry about giving Republicans another opportunity to say they are adding fuel to the fire.
But the Education Department has been telling student loan servicers not to give borrowers the required advanced notice that their payments will kick in ahead of the Aug. 31 moratorium deadline, Scott Buchanan, the executive director of the Student Loan Servicing Alliance, told the Wall Street Journal. ‘Maybe the department expects that the White House will yet again kick the can down the road.’
Biden told reporters last week that another extension was indeed on the table.
Federal student loan payments have not been required in over two years, first put on pause in March 2020. The freeze has been extended six times since then, twice under former President Trump and four times under Biden.
And while Biden has not come to a decision on a mass student loan forgiveness plan, his Education Department has implemented smaller plans to forgive the debts of those who were defrauded by schools or borrowers and those who work in public service. So far under Biden around $26 billion has been forgiven from hundreds of thousands of borrowers.
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